497K 1 d497k.htm BLACKROCK UTILITIES & TELECOMMUNICATIONS FUND, INC. BlackRock Utilities & Telecommunications Fund, Inc.

 

 

 

 

LOGO    November 24, 2010

 

Summary Prospectus

 

BlackRock Utilities and Telecommunications Fund, Inc.  |  Investor B1 and Investor C1 Shares

 

Class Ticker   Ticker Symbol

Investor B1 Shares

  MBGUX

Investor C1 Shares

  MCGUX

 

Before you invest, you may want to review the Fund’s prospectus, which contains more information about the Fund and its risks. You can find the Fund’s prospectus (including amendments and supplements) and other information about the Fund, including the Fund’s statement of additional information and shareholder report, online at http://www.blackrock.com/prospectus. You can also get this information at no cost by calling (800) 441-7762 or by sending an e-mail request to prospectus.request@blackrock.com, or from your financial professional. The Fund’s prospectus and statement of additional information, both dated November 24, 2010, as amended and supplemented from time to time, are incorporated by reference into (legally made a part of) this Summary Prospectus.

 

 

This Summary Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

 

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

 

Not FDIC Insured n No Bank Guarantee n May Lose Value


Summary Prospectus

 

 

 

Investment Objective


 

The investment objective of the BlackRock Utilities and Telecommunications Fund, Inc. (the “Utilities and Telecommunications Fund” or the “Fund”) is to seek both capital appreciation and current income.

 

Fees and Expenses of the Fund


 

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

 

Shareholder Fees

(fees paid directly from your investment)

   Investor B1
Shares
     Investor C1
Shares
 

Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price)

     None         None   

Maximum Deferred Sales Charge (Load) (as percentage of offering price or redemption proceeds, whichever is lower)

     4.00%         1.00%1   

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

   Investor B1
Shares
     Investor C1
Shares
 

Management Fee

     0.60%         0.60%   

Distribution and/or Service (12b-1) Fees

     0.75%         0.80%   

Other Expenses2

     0.48%         0.48%   

Acquired Fund Fees and Expenses3

     0.01%         0.01%   

Total Annual Fund Operating Expenses2,3

     1.84%         1.89%   
1

There is no CDSC on Investor C1 Shares after one year.

2

Other Expenses are restated to reflect current fees.

3

The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report, which does not include Acquired Fund Fees and Expenses and the restatement of Other Expenses to reflect current fees.

 

Example:

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

     1 Year        3 Years        5 Years        10 Years  

Investor B1 Shares

   $ 587         $ 879         $ 1,195         $ 1,999   

Investor C1 Shares

   $ 292         $ 594         $ 1,021         $ 2,212   

 

You would pay the following expenses if you did not redeem your shares:

 

     1 Year        3 Years        5 Years        10 Years  

Investor B1 Shares

   $ 187         $ 579         $ 995         $ 1,999   

Investor C1 Shares

   $ 192         $ 594         $ 1,021         $ 2,212   

 

Portfolio Turnover

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 25% of the average value of its portfolio.

 

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Principal Investment Strategies of the Fund


 

The Fund seeks to achieve its investment objective by investing in a diversified portfolio of securities that are issued by utilities companies including telecommunications companies. Under normal circumstances, the Fund will invest at least 80% of its assets in equity and debt securities issued by domestic and foreign utilities and telecommunications companies. Utilities and telecommunications companies include companies that are primarily engaged in the ownership or operation of facilities used to generate, transmit or distribute electricity, telecommunications, gas or water. Equity securities include common stock, preferred stock, securities convertible into common stock or securities or other instruments whose price is linked to the value of common stock. The Fund intends to invest primarily in equity securities, but Fund management may change its allocation among these types of investments as it deems appropriate to seek to achieve the Fund’s objective. The fixed-income securities in which the Fund invests generally are limited to those rated investment grade, and may be of any maturity. Investment grade securities are securities rated in the four highest rating categories by recognized rating agencies including Moody’s Investor Services, Inc., Standard & Poor’s and Fitch Ratings. The foreign securities in which the Fund invests may be issued by companies located in both developed and emerging markets. The Fund may invest in all market capitalization ranges, although the Fund will focus on mid-cap securities. The fund may invest in sovereign debt securities.

 

Principal Risks of Investing in the Fund


 

Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. The following is a summary description of certain risks of investing in the Fund.

 

n  

Credit Risk — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.

 

n  

Emerging Markets Risk — Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets.

 

n  

Equity Securities Risk — Stock markets are volatile. The price of equity securities fluctuates based on changes in a company’s financial condition and overall market and economic conditions.

 

n  

Foreign Securities Risk — Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:

 

  n  

The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight.

 

  n  

Changes in foreign currency exchange rates can affect the value of the Fund’s portfolio.

 

  n  

The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position.

 

  n  

The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries.

 

  n  

Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws.

 

  n  

Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments.

 

n  

Interest Rate Risk — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.

 

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n  

Market Risk and Selection Risk — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.

 

n  

Mid Cap Securities Risk — The securities of mid cap companies generally trade in lower volumes and are generally subject to greater and less predictable price changes than the securities of larger capitalization companies.

 

n  

Prepayment and Extension Risk — When interest rates fall, an issuer may redeem a security with call features by repaying it early, and the Fund may have to invest the proceeds in securities with lower yields. When interest rates rise, certain obligations will be paid off by the issuer more slowly than anticipated, causing the value of these securities to fall.

 

n  

Sector Risk — Sector risk is the risk that the Fund’s concentration in the securities of companies in a specific market sector or industry will cause the Fund to be more exposed to the price movements of companies in and developments affecting that sector than a more broadly diversified fund. Because the Fund invests primarily in one sector, there is the risk that the Fund will perform poorly during a downturn in that sector.

 

n  

Sovereign Debt Risk — Sovereign debt instruments are subject to the risk that a governmental entity may delay or refuse to pay interest or repay principal on its sovereign debt, due, for example, to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity’s debt position in relation to the economy or the failure to put in place economic reforms required by the International Monetary Fund or other multilateral agencies.

 

n  

Telecommunications Risk — The telecommunications industry is subject to governmental regulation and a greater price volatility than the overall market and the products and services of telecommunications companies may be subject to rapid obsolescence resulting from changing consumer tastes, intense competition, and strong market reactions to technological developments throughout the industry. Companies in the telecommunications sector may encounter distressed cash flows due to the need to commit substantial capital to meet increasing competition, particularly in formulating new products and services using new technology.

 

n  

Utility Industry Risk — When interest rates go up, the value of securities issued by utilities companies historically has gone down. In most countries and localities, the utilities industry is regulated by governmental entities, which can increase costs and delays for new projects and make it difficult to pass increased costs on to consumers. In certain areas, deregulation of utilities has resulted in increased competition and reduced profitability for certain companies, and increased the risk that a particular company will become bankrupt or fail completely. Reduced profitability, as well as new uses for or additional need of funds (such as for expansion, operations or stock buybacks), could result in reduced dividend payout rates for utilities companies. In addition, utilities companies face the risk of increases in the cost and reduced availability of fuel (such as oil, coal, natural gas or nuclear energy) and potentially high interest costs for borrowing to finance new projects.

 

4


Performance Information


 

The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Standard & Poor’s (S&P) 500 Index, the Standard & Poor’s (S&P) 500 Utilities Index and a composite index comprised of 70% of the S&P 500 Utilities Index and 30% of the S&P 500 Telecommunication Services Index, which are relevant to the Fund because they have characteristics similar to the Fund’s investment strategies. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052.

 

Investor C1 Shares

ANNUAL TOTAL RETURNS

Utilities and Telecommunications Fund

As of 12/31

 

LOGO

 

During the ten-year period shown in the bar chart, the highest return for a quarter was 15.33% (quarter ended June 30, 2003) and the lowest return for a quarter was –22.33% (quarter ended September 30, 2008). The year-to-date return as of September 30, 2010 was 2.15%.

 

As of 12/31/09

Average Annual Total Returns

   1 Year      5 Years      10 Years  

Utilities and Telecommunications Fund — Investor C1

                          

Return Before Taxes

     12.01      5.39      2.84

Return After Taxes on Distributions

     11.21      4.39      0.98

Return After Taxes on Distributions and Sale of Shares

     7.76      4.34      1.62

Utilities and Telecommunications Fund — Investor B1

                          

Return Before Taxes

     9.09      5.13      2.99

Standard & Poor’s (S&P) 500 Index (Reflects no deduction for fees, expenses or taxes)

     26.46      0.42      (0.95 )% 

Standard & Poor’s (S&P) 500 Utilities Index (Reflects no deduction for fees, expenses or taxes)

     11.91      6.05      4.88

70% S&P 500 Utilities Index/30% S&P 500 Telecommunication Services Index
(Reflects no deduction for fees, expenses or taxes)

     11.34      5.03      1.95

 

After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor C1 Shares only, and the after-tax returns for Investor B1 Shares will vary.

 

Investment Manager


 

The Fund’s investment manager is BlackRock Advisors, LLC (“BlackRock”). The Fund’s sub-adviser is BlackRock Investment Management, LLC. Where applicable, BlackRock refers also to the Fund’s sub-adviser.

 

5


Portfolio Manager


 

Name    Portfolio Manager of the Fund Since    Title

Kathleen Anderson

   2002    Managing Director of BlackRock, Inc.

 

Purchase and Sale of Fund Shares


 

Investor B1 and Investor C1 Shares generally are no longer available for purchase but continue to be available for dividend and capital gain reinvestment and certain authorized qualified employee benefit plans.

 

You may redeem shares of the Fund each day the New York Stock Exchange (“NYSE”) is open. You should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at (800) 441-7762, by mail (c/o BlackRock Funds, P.O. Box 9819, Providence, Rhode Island 02940-8019), or by the Internet at www.blackrock.com/funds.

 

Tax Information


 

The Fund’s dividends and distributions may be subject to Federal income taxes and may be taxed as ordinary income or capital gains, unless you are a tax-exempt investor or are investing through a retirement plan, in which case you may be subject to Federal income tax upon withdrawal from such tax-deferred arrangements.

 

Payments to Broker/Dealers and Other Financial Intermediaries


 

If you purchase shares of the Fund through a broker-dealer or other financial intermediary, the Fund and BlackRock Investments, LLC, the Fund’s distributor, or its affiliates may pay the intermediary for the sale of Fund shares and other services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your individual financial professional to recommend the Fund over another investment. Ask your individual financial professional or visit your financial intermediary’s website for more information.

 

* * *

 

The Fund’s prospectus and statement of additional information, both dated November 24, 2010, are incorporated by reference into this Summary Prospectus.

 

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INVESTMENT COMPANY ACT FILE # 811-6180

© BlackRock Advisors, LLC

BlackRock Utilities and Telecommunications Fund, Inc. — Prime

SPRO-UT-PRI-1110

   LOGO